One house, many stories

Matthew Siddall remembers the game very clearly: Just get in. Spend whatever it takes to grab a piece of Orange County real-estate while it was still possible.

“The market was on fire,” Siddall recalls of those months in early 2005. “Everyone said, 'It's just going to go up and up and up.' Even though the prices seemed outrageous, we felt like, 'If we don't get in now we're never going to get in.' That was the thinking then. And if you got into the housing market, you were golden.”

Siddall and Elizabeth Ann Woods made their move that spring, a year before they got married, plunking down $750,000 for a four-bedroom, two-story house on Hunter Lane in Huntington Beach. This would be their place — roomy enough for a family, situated near fine parks and schools. The garage would hold a pickup truck and a flashy, charcoal-colored Nissan 350Z. The beach wasn't far away. And though the monthly mortgage, with taxes and insurance, ran close to $5,000, together they were making excellent money – about $200,000 a year – and they imagined that affording the home would become easier over time.

That would not be the case. What happened to the Siddalls — and to the home they cherished – is one example of how painful the recession was, and how hard it hit so many. A vigorous housing market is always a bit like musical chairs. Five years ago, when the music stopped – when failing banks and an intractable lending crisis abruptly sent the economy into one of the worst downturns since the Great Depression – many well-established homeowners were able to sit tight and ride out a slow recovery. Others, because of poor timing, because of risky decisions, were committed to high fixed housing costs even as they lost jobs or their businesses went under.

Rampant foreclosures drove many from their homes into cheaper rentals. Some moved in with relatives or left Orange County altogether.

The Siddalls lost the house in the fall of 2010 after a long, frustrating struggle to modify their loan. They would end up in Temecula, sometimes a 90 minute drive from Matt Siddall’s job as a Los Angeles County firefighter based in Hacienda Heights. Their Huntington Beach home would be auctioned off by the bank for $567,000, substantially less than the Siddalls had paid for it. The investment company that bought it, identified by CountyRecordsResearch.com as city of Orange-based Laguna Pacific Professional Sales & Marketing, would remodel the kitchen and make other cosmetic upgrades. The investors would own the property for less than three months before flipping it to the current owners, Todd and Julie Newton, for $680,000 – or $113,000 more than they paid for it.

The Newtons’ timing was far better than the Siddalls’. The Newtons closed escrow in early 2011, as the home’s value was again trending upward. The couple figures that the stately, gray-green structure, with its green-marble countertops and leaded-glass windows, is worth significantly more than that now, although the numbers are moot because they have no plans to sell.

“We were very fortunate,” says Todd Newton, a financial analyst who grew up in Huntington Beach and now commutes 15 minutes to his job in Irvine. “I have lots of friends [for whom] the timing was just the opposite. It’s hard. I feel bad for them getting into the situations they were in, and there’s not much they can do about it.”

The shame of failure

The stigma of being caught off-guard, of being seen as, in Elizabeth Siddall's words, “one of those irresponsible people . . . who [go through] foreclosure and go bankrupt,” weighed heavily on the Siddalls. Matt, 41, who hails from Staffordshire, England, came from a family successful in business. He moved to Irvine as a teenager while his entrepreneur father established a chain of gift shops known as The Mole Hole in the United States.

“We never considered that we would be among the people who couldn't pay their bills – never in a million years,” he says of himself and his wife.

Elizabeth Siddall was an entrepreneur, too. She had started her own company, TLC Cleaning, at 21, providing home maid service and construction-site cleanup in Orange and Los Angeles counties. The company expanded to 24 employees and posted its best year in 2008, despite the shattering financial news that September. When banks began failing and credit dried up, the Siddalls had been living on Hunter Lane just over three years. Elizabeth was pregnant with their first child.

With shocking swiftness, she says, clients stopped hiring her. Cleaning is one of the first luxuries to go in a financial pinch. Even existing contracts seemed worthless.

“I would be waiting months and months for checks when I was still having to pay my employees, pay my bills,” Elizabeth Siddall remembers. “A lot of [customers] bounced checks to me. Some of them tried to not pay me, because they were trying to save themselves.”

Luke Siddall was born in January of 2009, a year fraught with the stress of being a new mother and trying to save a business that was suddenly in a tailspin. Elizabeth Siddall says she put about $60,000 in expenses on a credit line, trying to forestall the inevitable. Before the year was over, her once-thriving company was gone. She filed for bankruptcy.

Even though her husband continued to bring in a good salary, one income was not enough. “It took a huge toll on both of us,” Elizabeth Siddall says. “For me it was the worst because I was losing a company I had started myself and worked so hard for. I thought it would be something that I would always have, so losing it was devastating.” On top of that, she had the knowledge that she was bringing Matt down with her.

“I felt tons of guilt,” she says. “He told me I had to let it go, that we were in this together. But it was because of my business having to close that he had to go through all this.”

The foreclosure battle

They tried to cut back. They sold the fancy Nissan, shedding the car payments. Instead, they drove a 2001 Hyundai Santa Fe that they got from Elizabeth's parents. She took prerequisite classes to get into nursing school. None of it was enough. They fell delinquent on their mortgage payments and desperately sought a loan modification from Citi Mortgage. Matt Siddall says the goal was to lower their payments enough to stay in the house, or at least hang onto the property long enough to sell it – preferably after housing values began to recover.

“But . . . it was apparent after six or eight months of trying that they were never going to participate in a loan modification that could have kept us in our home,” Matt Siddall says. “I don't believe for a second they ever had any intention of that.”

The Siddalls say they endured a nightmare of ever-changing loan officers and vanishing forms. “One person would say, 'We have all your paperwork, we're just waiting for it to be approved,' “ Elizabeth Siddall remembers. “A month would go by. We'd call again. 'Oh, no, we're missing a paper.' “

After a string of delays, the Siddalls say, they were abruptly told, by phone, with no accompanying documentation, that they were approved for a new and affordable monthly payment. Later, the couple says, they were asked to make up the difference between the original payments and the new ones. Somewhere along the way – the Siddalls can’t remember exactly when – Citi Mortgage sold the loan to another firm.

Widespread irregularities in the way lenders handled foreclosures resulted last year in a $25 billion settlement between five major banks and state attorneys general nationwide. Affected homeowners in Orange County were projected to receive $1.1 billion of that money. In January, a separate settlement between federal regulators and 10 large banks provided an additional $8.5 billion to homeowners who were treated wrongly.

The action by government regulators was far too late to help the Siddalls, who gave up hope. “Once it became apparent we were not going to be able to stay in the house,” Matt Siddall says, “we decided to stop making payments.”

Still, the couple found it difficult to let go. They had not yet moved when the house went to auction in the fall of 2010. Elizabeth Siddall, who was pregnant again, remembers people coming to the door to take pictures. She sent them away. Representatives of the investment group showed up with paperwork demonstrating their ownership. They seemed friendly and sympathetic and gave the Siddalls extra time to get out.

“We’re not sure how long it would have legally taken to evict us,” Matt Siddall says. “We made it clear we weren’t interested in stripping the house. We weren’t vindictive. We just needed a couple more weeks to move.”

Home’s new buyers

The Newtons were three years ahead of the Siddalls entering the housing market. They closed escrow in 2002 on their first property, a single-story, three-bedroom house that cost them $330,000. It was located in Huntington Beach and, critically, they bought it before prices leapt upward.

The subsequent housing bubble and crash left the Newtons slightly better off, not worse, than they had been before. Todd Newton describes riding a roller-coaster. The value of that small starter home, barely 1,300 square feet, more than doubled to around $700,000, fell back to perhaps $400,000 after the recession hit, and slowly climbed again as the economy recovered. By the time the Newtons finally sold the house, for $520,000 in 2010, they had $160,000 in cash to apply toward a larger place.

In preparation for trading up, the Newtons sold before finding that next home and moved in with Todd's parents for several months over Christmas. “We wanted to be non-contingent,” Todd Newton says, “so if a house did become available we could jump on it.”

He and Julie, who are both 42 now, were determined to remain in Huntington Beach. They had grown up in the city. They first met in the seventh grade and began dating after graduating from Edison High School. Julie Newton had become a third-grade teacher in Huntington Beach. The couple now had a son, Ryan, who was attending school in Huntington Beach. Their couple's parents still live in Huntington Beach.

The target area for their search was the broad suburban swath from Adams Avenue to the ocean and from Beach Boulevard to the Santa Ana River. They watched Redfin and worked with a real-estate agent. A last-minute dip in prices enabled them to consider two-story homes such as the one on Hunter Lane. When the property popped up on the market, the Newtons were ready.

“We saw it that day and put in an offer that night,” Todd says. “And they accepted. We offered within $5,000 of what they were asking.”

They paid $680,000 for the house. That was $70,000 less than the Siddalls had paid, but the home was still a stretch.

“The taxes were what shocked me,” Julie Newton says. “The payment wasn’t that much more” than at the previous house, “because the interest rates were a lot better. And we had a bigger down payment than when we originally bought.” Even so, with impound fees, they were shelling out more than $3,600 a month and failed in their first attempt to refinance the loan. Finally, this spring, they got the payments down to $3,000.

The Newtons say the house might be worth $750,000 again today.

“The same floor plan sold for astronomical amounts across the street,” Julie Newton says. “They have a pool, but still it was amazing how much prices were going up.”

Todd Newton, cradling the family’s small dog, Smokey, says, “The last five or six months, it’s skyrocketed.”

Leaving Orange County

Moving to Temecula, where Elizabeth Siddall had grown up, felt like a bitter defeat, at first, for the Siddalls. “You swallow your pride,” her husband says. “We’re no longer living in the way that we’re accustomed. But you do what you have to do.”

October will make the three-year anniversary of the family’s move. Luke now has a baby sister, Ava, and the family has two dogs, a mutt named Mia and a 200-pound English mastiff named Vincent. “His family was a victim of the recession, as well,” Matt Siddall says. “They lost their house, couldn't house him in their apartment, and had to give him up.”

The Siddalls consider themselves fortunate. Elizabeth Siddall’s parents, who live in nearby Murrieta, bought a spacious, two-story home in Temecula, intending to move there. Instead, they agreed to allow the couple to move in, as long as they keep up with the mortgage and taxes.The costs are less than in Huntington Beach and Matt, by working overtime, can handle the bills himself. Elizabeth has become a stay-at-home mom.

“We’ve got this old, beat-up Hyundai,” Matt Siddall says, chuckling. “Now I’m happy to have the little beater that’s still running. . . that gets us from Point A to Point B. And now I look at how silly it is to worry about what I’m driving and what people think.”

Priorities have changed. They took a recent vacation to Oahu, staying free with friends, but otherwise keep to a tight budget. Elizabeth Siddall, who once vowed she would never return to small-town Temecula, says, “Living here, with the lifestyle we have, we’re happier.”

As if to mark the end of a bad chapter in their lives, a check arrived this past spring: their tiny share of the massive settlement between banks and public regulators.

“We got $400,” Matt Siddall says. He can only laugh. “Who’d have thought?”